Chapter # 6

NETWORK MODELS
PART 2

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 LEARNING OBJECTIVES
After completing this chapter, students will be able to:
1. Understand how to plan, monitor, and control projects with
the use of PERT and CPM
2. Determine earliest start, earliest finish, latest start, latest
finish, and slack times for each activity, along with the total
project completion time.
3. Understand the important role of software in project
management.

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 CHAPTER OUTLINE

CPM and PERT

1. Network Representation
2. Critical Path Computations
3. Construction of the Time Schedule

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 Project Management

• The application of knowledge, skills,

tools and techniques to project activities
to meet project requirements
• Organizing and managing resources so
the project is completed within defined
scope, quality, time and cost
constraints

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 Project
• Project :“A project is a series of activities
directed to accomplishment of a desired
objective.”
• Projects: Unique, one-time operations
designed to accomplish specific set of
objectives in a limited time frame.

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 The Language of Project Networks
Network analysis is the general name given to certain
specific techniques which can be used for the
planning, management and control of projects
• Network
– diagram of nodes and arcs
– used to illustrate technological relationships
• Path
– series of connected activities between two
events
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• Activity
– task or set of tasks
– use resources
• Event
– state resulting from completion of one or more
activities
– consume no resources or time
– predecessor activities must be completed

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• Critical path
– The longest path; determines expected project
duration
• Critical activities
– Activities on the critical path
• Slack
– Allowable slippage for path; the difference the
length of path and the length of critical path

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 Network Diagrams
• Network diagrams are the preferred technique
for showing activity sequencing.

• A network diagram is a schematic display of

the logical relationships among, or sequencing
of, project activities.

• Two main formats are the arrow and

precedence diagramming methods
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 Introduction
In many situations, managers are responsible for
planning, scheduling, and controlling project that
consist of numerous separate jobs or tasks performed
by a variety of departments and individuals. Often
these projects are so large and/or complex that the
manager cannot possibly remember all the
information pertaining to the plan, schedule, and
progress of the project. In these situations the program
evaluation and review technique (PERT) and the
critical path method (CPM) have proven to be
extremely valuable.
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 Introduction
PERT and CPM have been used to plan, schedule,
and control a wide variety of projects:
1. Research and development of new products
and processes.
2.Construction of plants, buildings and high
ways
3. Maintenance of large and complex equipment
4. Design and installation of new systems

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 Introduction

• In these types of projects, project managers must

schedule and coordinate the various jobs or activities
so that the entire project is completed on time. A
complicating factor in carrying out this task is the
interdependence of the activities; for example, some
activities depend on the completion of other activities
before they can be started. Because projects may have
as many as several thousand activities, project
managers look for procedures that will help them
answer questions such as the following.
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 Introduction

1. What is the total time to complete the project?

2. What are the scheduled start and finish dates for each
specific activity?
3. Which activities are “critical” and must be
completed exactly as scheduled to keep the project
on schedule?
4. How long can “noncritical “activities be delayed
before they cause an increase in the total project
completion time?

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 Introduction

• Although PERT and CPM have the same general purpose and
utilize much of the same terminology, the techniques were
developed independently. PERT was developed in the late
1950’s specifically for the POLARIS missile project. Many
activities associated with this project had never been attempted
previously, so PERT was developed to handle uncertain
activity times. CPM was developed primarily for industrial
projects for which activity times generally were known.
CPM offered the option of reducing activity times by adding
more workers and/or resources, usually at an increased cost.
Thus ,a distinguishing feature of CPM was that it identified
trade-offs between time and cost for various project activities.
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 Introduction

• Today’s computerized versions of PERT and CPM

have combined the best features of both approaches.
Thus, the distinction between the two techniques is no
longer necessary. As a result, we refer to the project
scheduling procedures covered in this chapter as
PERT/CPM. We begin the discussion of PERT/CPM
by considering a project for the expansion of the
Western Hills Shopping Center.

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 Six Steps of PERT/CPM

1. Define the project and all of its significant activities or

tasks.
2. Develop the relationships among the activities. Decide
which activities must precede others.
3. Draw the network connecting all the activities.
4. Assign time and/or cost estimates to each activity.
5. Compute the longest time path through the network; this
is called the critical path.
6. Use the network to help plan, schedule, monitor, and
control the project.

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 Example 1
PROJECT SCHEDULING WITH KNOWN ACTIVITY TIMES
• The owner of the Western Hills Shopping Center is
planning to modernize and expand the current 32-
business shopping center complex. The project is
expected to provide room for 8 to 10 new businesses.
Financing has been arranged through a private
investor. All that remains is for the owner the
shopping center to plan, schedule, and complete the
expansion project. Let us show how PERT/CPM can
help.
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 Example 1
• The first step in the PERT/CPM scheduling process is to
develop a list of the activities that make up the project. Table
7.1 also shows the list of the activities for the Western Hills
Shopping Center expansion project. Nine activities are
described and denoted A through I for later reference. Table
7.1 also shows the immediate predecessors and the activity
time (in weeks) for each activity. For a given activity, the
immediate predecessor column identifies the activities that
must be completed immediately prior to start of that
activity. Activities A and B do not have immediate
predecessors and can be started as soon as the project begins;
thus, a dash is written in the immediate predecessor column for
these activities.
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 Example 1
• The other entries in the immediate predecessor column
show that activities. The entries in the immediate
predecessor column show the activities C,D, and E
cannot be started until activity A has been completed;
activity F cannot be started until activity E has been
completed; activity G cannot be started until both
activities D and F have been completed; activity H
cannot be started until both activities B and C have
been completed and finally, activity I cannot be started
until both activities G and H have been completed .The
project is finished when activity I is completed.
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Example 1

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 Example 1
• The last column in Table 7.1 shows the number of
weeks required to complete each activity. For
example, activity A takes 5 weeks, activity B takes 6
weeks, and so on. The sum of activity time is 51. As a
result, you may think the total time required to
complete the project is 51 weeks. However, as we
show, two or more activities often may be scheduled
concurrently, thus shortening the completion time for
the project. Ultimately,PERT/CPM will provide a
detailed activity schedule for completing the project
in the shortest time possible.
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 Example 1
• Using the immediate predecessor information in Table
7.1, we can construct a graphical representation of the
project, or the project network. Figure 7.1 depicts the
project network for Western Hill Shopping Center. The
activities correspond to the nodes of the network (drawn
as rectangles) and the arcs (the lines with arrows) show
the precedence relationships among the activities. In
addition, nodes have been added to the network to denote
the start and the finish of the project. A project network
will help a manger visualize the activity relationships and
provide a basis for carrying out the PERT/CPM
computations.
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Example 1

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 Example 1
• The Concept of a Critical Path
• To facilitate PERT/CPM computations, we modified
the project network as shown in Figure 7.2. Note that
the upper left-hand corner of each node contains the
corresponding activity letter. The activity time
appears immediately below the letter. To determine
the project completion time, we have to analyze the
network and identify what is called critical path for
the network. However, before doing so, we need to
define the concept of a path through the network.

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Example 1

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 Example 1
• A path is a sequence of connected nodes that leads from
Start node to the Finish node. For instant, one path for the
network in Figure 7.2 is defined by the sequence of nodes A-
E-F-GI. By inspection, we see that other paths are possible,
such as A-D-G-I, A-C-H-I, and B-H-I. All paths in the
network must be traversed in order to complete the project, so
we will look for the path that requires the most time.
Because all other paths are shorter in duration, this longest
path determines the total time required to complete the
project. If activities on the longest path are delayed, the entire
project will be delayed. Thus, the longest path is the critical
path. Activities on the critical path are referred to as the
critical activities for the project.
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 Example 1

• Determining the Critical Path

• We begin by finding the earliest start time and a latest start
time for all activities in the network. Let
• ES= earliest start time for an activity
• EF= earliest finish time for an activity
• t= activity time
• The earliest finish time for any activity is
• EF=ES+t

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 Example 1

• Activity A can start as soon as the project

starts, so we set the earliest start time for
activity A equal to 0. With an activity time of
5 weeks, the earliest finish time for activity A
is EF=ES+t=0+5=5.
• We will write the earliest start and earliest
finish times in the node to the right of the
activity letter. Using activity A as an example,
we have
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Example 1

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 Example 1

• Because an activity cannot be started until all immediately

preceding activities have been finished, the following rule can
be used to determine the earliest start time for each activity.
• The earliest start time for an activity is equal to the largest of
the earliest finish times for all its immediate predecessors.
• Continuing with this forward pass through the network , we
can establish the earliest start times and the earliest finish
times for all activities in the network. Figure 7.3 shows the
Western Hills Shopping Center Project Network with the ES
and EF values for each activity.

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Example 1

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 Example 1

• We now continue the algorithm for finding the critical path by

making a backward pass through the network. Since the
project can be completed in 26 weeks; we begin the backward
pass with a latest finish time of 26 for activity I. Once the
latest finish time for an activity is known, the latest start time
for an activity can be computed as follows. Let
• LS=latest start time for an activity
• LF=latest finish time for an activity latest finish time is
• then
• LS=LF-t (7.1)

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33
• The following rule can be used to determine the latest finish time for each
activity in the network.
• The latest finish time for an activity is the smallest of the latest start times
for all activities that immediately follow the activity.
• Logically, this rule states that the latest time an activity can be finished
equals the earliest (smallest) value for the latest start time of following
activities. Figure 7.4 shows the complete project network with the LS and
LF backward pass results. We can use the latest finish time rule to verify
the LS and LF values shown for activity H. The latest finish time for
activity H must be the latest start time for activity I. Thus, we set LF =24
for activity H. Using equation (7.1), we find that LS = LF – t =24 -12 = 12
as the latest start time for activity H. These values are shown in the node
for activity H in Figure 7.4.
•
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Example 1

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 Example 1
• Activity A requires a more involved application of the latest start time rule. First, note that three
activities ( C, D and E) immediately follow activity A. Figure 7.4 shows that the latest start times
for activities C, D and E are LS = 8, LS = 7, and LS = 5, respectively. The latest finish time rule
for activity A states that the LF for activity A is the smallest of the latest start times for activities
C, D and E. With the smallest value being 5 for the activity E, we set the latest finish time for
activity A to LF = 5.
• After we have completed the forward and backward passes, we can determine the amount of slack
associated with associated with each activity. Slack is the length of time an activity can be
delayed without increasing the project completion time. The amount of slack for an activity is
computed as follows:
• Slack = LS – ES = LF – EF
• For example, the slack associated with activity C is LS – ES = 8 – 5 = 3 weeks. Hence, activity C
can be delayed up to 3 weeks, and the entire project can still be completed in 26 weeks. In this
sense, activity C is not critical to the completion of the entire project in 26 weeks. Next, we
consider activity E. Using the information in Figure 7.4 we find that the slack is LS – ES = 5 – 5 =
0. Thus, activity E has zero, or no, slack. Thus, this activity cannot be delayed without increasing
the completion time for the entire project. In other words, completing activity E exactly as
scheduled is critical in terms of keeping the project on schedule. Thus, activity E is a critical
activity. In general, the critical activities are the activities with zero slack.
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 Example 1

• That start and finish times shown in Figure 7.4 can be used to
develop a detailed start time and finish time schedule for all
activities. Putting this information in tabular form provides the
activity schedule shown in Table 7.2. Note that the slack
column shows that activities A, E, F, G, and I have zero slack.
Hence, these activities are the critical activities for the project.
The path formed by nodes A-E-F-G-I is the critical path in the
Western Hills Shopping Center Project Network. The detailed
schedule shown in Table 7.2 indicates the slack or delay that
can be tolerated for the noncritical activities before these
activities will increase project completion time.

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Example 1

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 PROJECT SCHEDULING WITH
UNCERTAIN ACTIVITY TIMES

• In this section we consider the details of

project scheduling for a problem involving
new product research and development.
Because many of the activities in this project
have never been attempted, the project
manager wants to account for uncertainties in
the activity times. Let us show how project
scheduling can be conducted with uncertain
activity times.
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 Example 2

• The Daugherty Porta-Vac Project

• The H.S Daugherty Company has manufactured industrial
vacuum cleaning system for many years. Recently, a
member of the company’s new product research team
submitted a report suggesting that the company consider
manufacturing a cordless vacuum cleaner. The new
product, referred to as Porta-Vac, could contribute to
Daugherty’s expansion into the household market.
Management hopes that it can be manufactured at a
reasonable cost and that its portability no-cord
convenience will make it extremely attractive.
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 Example 2
• Daugherty’s management wants to study the feasibility of manufacturing
the Porta-Vac product. The feasibility study will recommend the action to
be taken. To complete this study, information must be obtained from the
firm’s research and development (R&D), product testing, manufacturing,
cost estimating, and market research groups. How long will this feasibility
study take? In the following discussion, we show how to answer this
question and provide an activity schedule for the project.
• Again, the first step in the project scheduling process is to identify all
activities that make up the project and then determine the immediate
predecessor(s) for each activity. Table 7.3-a shows these data for the Porta-
Vac project.
• The Porta-Vac project network is shown in figure 7.5. Verify that the
network does in fact maintain the immediate predecessor relationships
shown in Table 7.3-a.
•
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Example 2

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 Example 2
• Uncertain Activity Times
• Once we have developed the project network, we will need information on
the time required to complete each activity. This information is used in the
calculation of the total time required to complete the project and in the
scheduling of specific activities. For repeat projects, such as construction
and maintenance project, managers may have the experience and historical
data necessary to provide accurate activity time estimates. However, for
new or unique project, estimating the time for each activity may be quite
difficult. In fact, in many cases, activity times are uncertain and are best
described by a range of possible values rather than by one specific time
estimate. In these instances, the uncertain activity times are treated as
random variables with associated probability distributions. As a result,
probability statements will be provided about the ability to meet a specific
project completion date.

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 Example 2
• To incorporate uncertain activity times into the analysis, we need to obtain three
time estimates for each activity:
• Optimistic time a = the minimum activity time if everything progresses ideally
• Most probable time m = the most probable activity time under normal conditions
• Pessimistic time b = the maximum activity time if significant delays are
encountered
• To illustrate the PERT/CPM procedure with uncertain activity times. Let us
consider the optimistic, most probable, and pessimistic time estimates for the Porta-
Vac activities as presented in Table 7.3 Using activity A as an example, we see that
the most probable time is 5 weeks with a range from 4 weeks (optimistic) to 12
weeks (pessimistic). If the activity could be repeated a large number of times, what
is the average time for the activity? This average or expected time (t) is as follows:
• t=(a+4m+b)/ 6

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 PERT
PERT(Program Evaluation and Review Technique)
is the same as CPM but the difference is that
the project manager is sometimes not certain
about the duration of each activity, so he gives
three time estimates for each activity:
– a: Optimistic time
– b: Pessimistic time
– m: Most probable time

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Example 2

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 Example 2

Required:
1. Construct the project network.
2. Calculate the finish time of the project.
3. What is critical path?

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Example 2

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Example 2

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Example 2

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Example 2

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 Example 2

• The expected time to finish the project is

17 weeks.

Path Duration
AEHIJ 17

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Appendix A

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Appendix A

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